10/16/16

The permanent cease of production and sales of the Galaxy Note 7 will inevitably force Samsung Electronics to slow down its future projects such as iris recognition, finance, fintech, security, cloud and electric cars.

According to the smartphone industry on October 13, the shutdown of the Galaxy Note 7 business will have a negative impact on Samsung Electronics’s plan to expand its wearable device business and solidify the foundation for new services based on the Galaxy Note 7.

First, the Galaxy Note 7 fiasco will make a direct hit on the Gear VR, a wearable VR device which is compatible with the Galaxy Note 7. The Gear S3 to be launched at the end of this month was expected to create a boom with the Galaxy Note 7. Now it is likely that the device will wind up a free accessory or discounted package product for the Galaxy Note 7. The demise of the Galaxy Note 7 is also expected to delay Samsung Electronics’s plan to expand its bio and health business by making good use of the device’s upgraded health management functions.

Smartphone industry watchers also point out that Samsung Electronics will not be able to solidify its foothold to the fintech market through iris recognition and cloud technology for the time being. Samsung Electronics loaded the Galaxy Note 7 with “Samsung Cloud” to distinguish itself from its rivals in the cloud sector which is a next-generation growth engine industry. The global smartphone giant reinforced its own security solution named “Knox” and introduced “a security folder” inaccessible from the outside. The two features are also put on hold.

A sudden brake was put on “Samsung Pass” in the Galaxy Note 7 which realizes financial settlement and logins based on iris recognition on one stroke. “It is hard to believe. But more than the half of technologies for iris recognition are also applied to smart cars,” said Kim Hyung-seok, head of the Multimedia Development Group of the Wireless Device Business Division at Samsung Electronics in a recent cloud show, emphasizing that Samsung Electronics’s iris recognition technology can be expanded into the smart car sector. In addition, the fall of the Galaxy Note may negatively affect the company’s new premium phones including the Galaxy S8 to be launched next March. This is because the smartphone industry has predicted that the Galaxy 68 can be developed as a foldable smartphone but unverified innovative technology can deal a big blow to the Galaxy S8 if it is found that the new technology has a flaw.

But some experts analyze that this incident serve as an opportunity for Samsung Electronics to step up the functions of its smartphones as platforms to connect to other new technologies or business. “It is an overreaction to say that the discontinuance of the Galaxy Note 7 will cast a dark cloud over new business. Rather it will be a chance,” said Wi Jung-hyun, a professor of strategic management at Chung-Ang University. “Many models before the Galaxy Note 7 are already distributed in the market so little negative impact will be made on the fintech sector,”